Khmer Language and Currency Required in Accounting Records and Financial Statements
Subject: Accounting
Applicable Industries: Logistics

On 1 September 2021, Accounting and Audit Regulator (“ACAR”) issued Circular 009 on the Usage of Khmer Language and Currency in Accounting Records and Financial Statements (“Circular 009”) comes into effect from 1 January 2022.

The 2016 Law on Accounting and Auditing (Royal Kram No. NS/RKM/0416/006 dated 11 Apr 2016) and Sub-decree 79 (ANKr.BK dated 1 June 2020) present the obligations and penalties for entities in relations to maintaining accounting records and financial statements in Khmer language and currency. Click here to learn Law on Accounting and Auditing and here Sub-decree 79.

The details of Circular 009 are:

  • Enterprises or not-for-profit organizations (“NFPOs”) can use English language in their accounting systems and/or other related software to record accounting transactions in the event that enterprises or NFPOs are unable to procure accounting software that can support Khmer language. Approval is not required to use accounting software that cannot support the Khmer language however enterprises or NFPOs must formally notify the Accounting and Auditing Regulator (“ACAR”) clearly stating the current name and source of their chosen accounting software.
  • Internal accounting supporting documents need to be in Khmer language. English language documents may be used to support the Khmer versions. Accounting documents produced using English accounting software as stated in point 1 above and accounting documents prepared and provided by foreign business partners or organization partners, foreign fund providers or business administrations can be in English language. For supporting documents that are in a language aside from English or Khmer will need to be translated to Khmer or English and affixed with the seal of the enterprise. The responsibility to translate the supporting documents sits with the enterprise and/or NFPO. Example: A sale and purchase agreement which is a language aside from Khmer and English will need to be translated into English or Khmer with a signed acknowledgment by the enterprise owner or authorized representative and affixed with the enterprise or NFPO’s seal.
  • An Enterprise or NFPO can choose Khmer Riel (“KHR”) or another foreign currency as the functional currency in compliance with the Cambodian International Financial Reporting Standards (“CIFRS”) which apply to daily recording accounting transactions.
  • An Enterprise or NFPO must prepare its annual financial statements in Khmer language and denominated in KHR, or in dual currency (foreign currency and KHR), in compliance with CIFRS and the National Bank of Cambodia’s (“NBC”) exchange rate, respectively. These annual financial statements must be submitted to ACAR according to the guidelines on maintaining compliance with the Law on Accounting and Auditing and related subordinate legislation.
  • Enterprise which operates petroleum transactions within Cambodia territory must adhere to and implement Prakas 563 SHV.BrK dated 04 June 2018 on the Implementation of Tax Provisions for Petroleum Transactions.

During the implementation of this Circular, ACAR will monitor follow up and evaluate the capability, viability and levels of compliance in terms of ensuring that accounting records are maintained in Khmer language and denominated in KHR as set out above.

The ACAR may request or direct the introduction of additional procedures to implement this Circular.

Advance Grand Formula Co., Ltd is licensed audit firm from Accounting and Auditing Regulator (“ACAR”) and member audit firm of Kampuchea Institute of Certified Public Accountants and Auditors (KICPAA). 

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